Bogidhola Tea & Trading Company Limited And Another v. Hira Lal Somani .

S.B Sinha, J.— Leave granted.

2. This appeal is directed against the judgment and order dated 3-1-2007 passed by the Gauhati High Court in MC No. 3398 of 2004 whereby and whereunder the appeal preferred by the appellants herein from a judgment and decree dated 19-4-1990 passed in Suit No. 2 of 1989, was dismissed on the premise that the appellants had not shown sufficient cause for condonation of 10 months' delay in filing the said appeal.

3. The parties herein were on business terms. The appellants were to supply 22,000 kg of “made tea” for 1984 season and 50,000 kg of “made tea” for 1985 season to the respondent. However, the appellants supplied only 5547 kg of “made tea” for 1984 season and 18,245 kg of “made tea” for 1985 season. The respondent filed a suit for a decree for a sum of Rs 5,22,669.66p. together with interest thereon at the rate of 18% per annum. A suit was filed towards the price of the remaining amount for terminal tea supply. In Para 5 of the plaint, the respondent inter alia averred:

“The price for other remaining quantity of made tea of 1985 season made available by the defendants to the plaintiff, could not be finalised as the same were found to have no proper market and hence were not saleable at Jorhat. As such, as per instruction/discussion of the defendants, remaining qualities of 14,796 kg of made tea of 1985 season were sent to the tea auction market at Guwahati and in Calcutta. The sale proceeds of the said tea on sale of auction markets were to be adjusted with the advances already made by the plaintiff to the deponents. After 18-4-1985 the plaintiff had paid a total sum of Rs 6,22,116 inclusive of Rs 1,30,000 as shown in Schedule A below.”

The first bill referred to in this appeal reads thus:

“Bill dated 5-6-1985 for….. Rs 46,594.80 Bill dated 5-6-1985 for…… Rs 86,225.00 For sale proceeds on 16-8-1985 Rs 79,824.91 For sale proceeds on 26-8-1985 Rs 4608.60 For sale proceeds on 9-9-1985 Rs 9101.83 For sale proceeds on 19-9-1985 Rs 3766.70 For sale proceeds on 12-11-1985 Rs 2502.54 For sale proceeds on 9-12-1985 Rs 30,615.48 For sale proceeds on 23-12-1985 Rs 39,119.62 For sale proceeds on 3-1-1986 Rs 5945.78 For sale proceeds on 20-1-1986 Rs 9784.28 Rs 3,18,089.54”

4. Allegedly, despite service of summons the appellants did not appear. The respondent-plaintiff made a prayer before the trial court that a decree be passed under Order 8 Rule 10 CPC. He declined to examine any witness. The learned trial court by a judgment and order dated 19-4-1990 decreed the suit stating:

“Learned lawyer of the plaintiff side is present filing his hazira. The defendant side is absent without any step. Seen the previous orders of this Court. The suit is taken up for ex parte hearing. Heard learned counsel for the plaintiff. He submits Court to take action under Order 8 Rule 10 CPC and declined to examine any PW. Hence, perused the plaint and the relevant documents submitted by the plaintiff in support of his plaint. Prima facie case is held proved in favour of the plaintiff as per plaint.

The suit is decreed ex parte for realisation of Rs 5,22,669.66p. with costs of the suit and future interest per plaint as prayed for.”

The appellants contended that they were not aware of passing of the said decree.

5. In the year 1997, an execution case was filed. Summons in the said execution case were served upon the appellants. One Shri Tapan Gogoi was appointed as an advocate in the said execution case. However, no further steps were taken. The execution proceeding was stayed on 15-7-2000.

6. In the month of September 2000, the appellants herein filed an application under Order 9 Rule 13 CPC for setting aside the said ex parte decree. An application for condonation of delay in filing the suit was also filed. The said application was dismissed by an order dated 22-9-2003 as the appellants could not allegedly satisfactorily explain the cause for delay in filing the said application as also in view of Article 123 of the Schedule appended to the Limitation Act, 1963.

7. A civil revision application was preferred thereagainst which was also dismissed by the High Court by its order dated 2-1-2004. Liberty, however, was granted to the appellants to prefer an appeal against the original decree. An appeal thereafter was filed by the appellants along with an application for condonation of delay. The High Court by reason of the impugned judgment refused to condone the delay and consequently dismissed the appeal.

8. Mr Hansaria, learned Senior Counsel appearing on behalf of the appellants, inter alia, would submit that the High Court committed a serious error in passing the impugned judgment insofar as it failed to take into consideration that assuming that the appellant-defendants had not filed written statement, it was obligatory on the part of the trial Judge to satisfy itself about the bona fides of the claim of the respondent-plaintiff. Learned counsel urged that having regard to the fact that the last advance was purported to have been made on 19-6-1985, the suit which was filed on 2-1-1989 was barred by limitation.

9. Learned counsel appearing on behalf of the respondent, on the other hand, submitted that assuming that the learned trial Judge should not have granted a decree in terms of Order 8 Rule 10 CPC, the appellants were obligated to explain the delay in preferring an appeal. The appeal being continuation of the suit, the learned counsel would submit that if the same could not have been entertained on the ground of being barred by limitation, the question of setting aside the decree by the High Court in exercise of its appellate jurisdiction did not and could (sic not) arise.

10. While issuing notice in terms of order dated 16-4-2007, this Court directed the appellants to deposit a sum of Rs 2 lakhs before the executing court within four weeks from the said date. It is stated before us by learned Senior Counsel Mr Hansaria, that the aforementioned sum has been deposited on or about 25-6-2007.

11. Ordinarily, we would not have interfered in such matter. However, it appears to be a gross case. The appellants before us have been able to show that the ex parte decree dated 19-4-1990 passed by the learned Additional District and Sessions Judge, Jorhat, ex facie suffers from non-application of mind. Had the learned Judge applied its mind even to the averments made in the plaint, he should have asked himself the question as to whether in the absence of any acknowledgment in writing, as a result whereof the period of limitation would start running afresh, the suit could have been decreed. Section 3 of the Limitation Act, 1963 mandates that a court would not exercise its jurisdiction for any relief in favour of a party if the same is found to be barred by limitation. Although such a defence has not been raised, the statute obligated upon the court of law to consider as to whether a suit is barred by limitation or not. In the event it was found that the suit was barred by limitation, the court had no jurisdiction to pass a decree. It was, therefore, essential for the learned trial Judge to pose unto itself the right question, particularly when without adduction of oral evidence the pleading raised in the plaint could not be said to have been established. It was, therefore, not a case where the court could have invoked the provisions of Order 10 Rule 8 CPC. Even otherwise, the suit was set down for ex parte hearing. The learned trial Judge stated that only a prima facie case was found out from the plaint and other documents which were not sufficient for passing a decree as therefor the plaintiff was bound to prove his case.

12. For the reasons aforementioned, having regard to the peculiar facts and circumstances of this case, we think that it is a fit case where the High Court should have condoned the delay. We, therefore, set aside the judgment of the High Court. Ordinarily, we would have remitted the matter back to the High Court for consideration thereof on merit of the appeal, but as we have ourselves looked to the records of the case, we are of the opinion that interest of justice would be subserved if we set aside the ex parte decree dated 19-4-1990. We direct accordingly.

13. This order shall, however, be subject to the condition that the appellants shall deposit a further sum of Rs 1 lakh before the executing court which shall be subject to the outcome of the suit. The appellants shall further pay a sum of Rs 25,000 to the respondent towards costs. The respondent shall be entitled to withdraw the sum deposited by the appellants, upon furnishing security.

14. The appellants may file written statements before the trial court within six weeks and the learned trial Judge may consider the desirability of disposing of the suit within three months from the date of receipt of this order.

15. The appeal is disposed of with the aforementioned observations and direction.